Korean listed companies show a widening ESG disclosure gap as of 2025, according to Kim Yun-hee, an analyst at the National Assembly Budget Office. Among 801 KOSPI-listed companies analyzed, only 222 companies (27.7%) disclosed ESG information, with top-tier firms by asset size achieving a 76.2% disclosure rate while bottom-tier companies recorded 0%. The disparity stems from differences in specialized personnel, data infrastructure, and financial capacity to handle disclosure requirements. Kim's analysis report titled 'ESG Disclosure: Who Does It and Why—Analysis of Voluntary Disclosure Determinants' highlights concerns that small and mid-sized manufacturers with high carbon risk remain in a disclosure blind spot ahead of mandatory ESG reporting starting in the 2027 fiscal year for companies with consolidated assets exceeding 10 trillion won.
Top 20% Companies Achieve 76.2% ESG Disclosure Rate While Bottom 20% Record Zero
Kim Yun-hee stated that the gap in voluntary ESG disclosure among domestic listed companies has reached concerning levels. "The number of companies participating in voluntary disclosure has increased over the past five years, but the growth rate is gradually slowing," Kim explained. As of 2025, among 801 KOSPI-listed companies analyzed, 222 companies disclosed ESG information, representing 27.7% of the total.
The disclosure rate varied dramatically by asset size. Companies in the top 20% by assets (5th quintile) recorded a 76.2% disclosure rate, while companies in the bottom 20% (1st quintile) showed a 0% disclosure rate. By industry sector, the financial sector achieved a 59.6% disclosure rate, while the manufacturing sector reached only 22.5%, below the overall average. "ESG disclosure is ultimately becoming the exclusive domain of 'companies with capacity' that can afford specialized personnel, data infrastructure, and costs," Kim stated. "If mandatory disclosure targets are set based solely on asset size criteria, small and mid-sized manufacturing companies with high carbon risk will continue to remain in the disclosure blind spot."
Asset Size and National Pension Investment Drive Voluntary ESG Disclosure
Kim identified three key determinants of voluntary ESG disclosure: asset size, National Pension Fund investment amount, and exposure to global carbon regulations including the Emissions Trading System (ETS) and Carbon Border Adjustment Mechanism (CBAM). "These variables significantly increased the probability of voluntary disclosure," Kim explained.
Contrary to common assumptions, simple foreign ownership percentage showed no statistically significant relationship with voluntary ESG disclosure probability. Kim noted that this finding challenges the conventional view that foreign investor pressure automatically drives ESG reporting.
Older Companies Show Lower ESG Disclosure Rates Than Younger Firms
Kim's analysis revealed that longer company age correlates with significantly lower voluntary disclosure participation. Companies younger than 23 years achieved a 41.5% voluntary disclosure rate, while companies older than 64 years recorded only a 22.6% disclosure rate.
"Companies with strongly entrenched existing financial disclosure and reporting systems experience relatively delayed establishment of dedicated ESG organizations and transitions to data infrastructure," Kim explained. "This ultimately suggests that 'older small and mid-sized manufacturing companies' are positioned in a massive blind spot for ESG disclosure."
South Korea Implements Mandatory ESG Disclosure for Large Firms Starting 2027 Fiscal Year
The South Korean government announced a 'Sustainability Disclosure Institutionalization Plan' that mandates ESG legal disclosure starting in the 2027 fiscal year for KOSPI-listed companies with consolidated assets of 10 trillion won or more. Kim evaluated the plan as having undergone forward-looking revisions compared to the opinion-gathering proposal announced in February, including expanding the application target from consolidated assets of 30 trillion won to 10 trillion won and implementing it immediately as 'legal disclosure' included in business reports under the Capital Markets Act.
Kim analyzed the measure as simultaneously pursuing corporate burden reduction and global consistency through three years of comprehensive immunity and Scope 3 deferral.
FAQ
What percentage of Korean KOSPI companies disclosed ESG information as of 2025?
As of 2025, 222 out of 801 KOSPI-listed companies disclosed ESG information, representing 27.7% of the total analyzed companies according to Kim Yun-hee's National Assembly Budget Office report.
What factors drive voluntary ESG disclosure among Korean companies?
Asset size, National Pension Fund investment amount, and exposure to global carbon regulations including the Emissions Trading System and Carbon Border Adjustment Mechanism significantly increase voluntary disclosure probability. Foreign ownership percentage showed no statistically significant correlation with disclosure rates.
When does mandatory ESG disclosure begin for large Korean companies?
Mandatory ESG legal disclosure begins in the 2027 fiscal year for KOSPI-listed companies with consolidated assets exceeding 10 trillion won, as part of South Korea's Sustainability Disclosure Institutionalization Plan.
